Finance Bill 2014

It gives me pride and pleasure to be here alongside the Prime Minister and our coalition partners to present the Finance Bill 2014 to Parliament, a package that has been built around the ideals that the Government ran on and the ideals that the people of the United Kingdom resoundingly accepted in the most recent election: that a dynamic economy is not one that returns wealth back to the very few but rather one that focuses on promoting our great country as a community where everyone has an opportunity. A dynamic economy is one where people work together towards the common benefit of all.

This budget - indeed this very speech - was produced cooperatively. Working with my right honourable friend, the member for Sutton and Cheam, and others from both the Labour and Liberal Democrat parties and beyond, we have produced a manifesto that secures Britain's future and delivers a better plan for our country. I will start by discussing the strategy and vision that guides this budget – my right honorable friend from Sutton and Cheam will further detail several of the proposals, especially those regarding green growth.

As part of that plan, we cannot overlook that the projections for the next year seem positive. Economic growth will increase as more investment comes into our economy and as jobs are created. We look to see unemployment falling as more Britons are going to work and as confidence in our economy improves. Our economy looks set to grow by over 2.5% over the next year, outpacing inflation, which will return real wage growth to the people of this country that was not delivered under the last Government. We’re taking this growth and returning it to small businesses in the form of a real rate cut in business income taxes, going from 20% to 18%. This money will support a sector- small businesses- that has driven more than 70% of private sector job growth and that now employs more than 60% of all private sector workers in this country. Investing here will help us build on this growth and build on the promises we’re making today. And we’ll continue the efforts to invest in our businesses and our job creating sectors by pushing this even lower in the next Finance Bill, going to a 15% rate for the millions of small enterprises that have proven to grow our economy and provide meaningful opportunities to British workers and their families.

But while we are seeing the positives, we also must be prudent and responsible. We cannot spend our way into growth forever, which is why while times are good and while we will be making targeted investments to help the people of this country, this Government will be launching a spending review, with the goal of securing 5% reductions in the current spending, especially administrative spending, of all non-ringfenced departments. The member for Sutton and Cheam will be heading up this review, with the purpose of consolidating saving processes that commenced under previous Governments. He will also be spearheading reforms into further ways to change the atmosphere around spending to deliver more efficient services without frontline cuts. He has already identified the requisite savings, and then some, in his own department and will be making a statement to the house later this week.

We have already started on this path to responsibility; excluding capital spending, the deficit is going to fall from 5% of our GDP to less than 4%. At the same time, we will be expanding our push for capital expenditures to lay a foundation: a foundation for better growth, for greener growth, and for healthier growth.

This Government is moving to help ensure that the revenue that we do take in is done so fairly. For too long we have placed a priority on helping the wealthy, on providing tax incentives for investors rather than the workers who build and run this country day in and day out. That’s why this Government is going to change the tax treatment on capital gains to ensure that gains are treated as they should be: like income. This will not change the impact on investment- the drivers of that are not the marginal change in tax but rather the value of the human capital and the physical capital that we will be able to support through this budget and through the future.

At the same time, we will be looking to tighten our enforcement of existing tax laws and ensure that, legal or otherwise, individuals do not get out of paying their fair share. An initial investment in our revenue collection, coupled with forthcoming rules targeted not at the average taxpayer but at those who can afford to find the narrowest loopholes will help us increase revenues and better the provisions of public services without having to ask British workers and families to pay more. This enforcement of existing rules will increase revenues by £400 million this year alone, rising to £4 billion by 2018- allowing us to put even more resources into projects and programs that have a direct benefit to the people of this country that need it most. And at the same time, we have reformed our tax code to promote green growth and end those measures that unfairly disadvantage heavily polluting fossil fuels.

In fact, it is because of these new proposals that we can greatly enhance our capital spend. More than £13 billion spread across a wide range of areas: £3 billion in green capital investment, putting people to work across the country as we change how we produce energy and how we use it. £2 billion support for British businesses, particularly the small businesses to help them navigate the lanes of domestic and international trade. More than £5 billion for new housing and urban infrastructure. Increased funding for the regions. New hospitals and expanding the beds available in them. New schools and ensuring that we have room to expand our stock and base of human capital. Another £500 million for local projects that have needed funding- above and beyond the money that we’re sending to the regions and to localities throughout the country. This funding will go towards projects that are ready now- and will give this Government a capital stock to continue investments in the future through established funding programs.

Any economist will tell you- no matter what their political persuasion- that when the government makes targeted investments in human and physical capital, it has a greater impact on the economy. Directly, the money will be spent on British workers who will have more money to spend and to save. And indirectly, businesses will see the investments we are making, and they will want to choose our country as one with an economically-sound future and invest here rather than choose anywhere else in Europe. We will see this boost in capital spending create that much again and more in new opportunities, new income, and new wealth for Britain, focused on the workers that keep this country moving and growing.

Investment in our workers and in this country, though, is not and cannot be limited just to new initiatives.

Higher education is a key to greater earnings potential and greater opportunities, and it’s sad that we’ve become a country that has worked to put a lock on the door to higher education saying that only those with means need apply. This Government is slashing tuition fees- from £9,000 to £6,000 and increasing our funding for these institutions directly to make colleges easier to afford. Education shouldn’t come at a dear premium, and we are making a huge investment in the future workers, the future engineers, the future managers and designers and even MPs to ensure that a Britain of the future is well-equipped to handle any problems that may come our way. We’re investing in local education as well, with new funds to support lessons and special educational needs.

This Government is also taking seriously its responsibility to provide for the least fortunate in this country, for those that are looking for and who have not been able to find opportunities. We’re expanding the number of apprenticeships across all age groups in the country by 15,000 new places, boosting the number far above population growth or graduation rates to ensure that we can get as many people into skills positions as we can. We are establishing a dedicated fund for homelessness and rough sleeping prevention in this country and making sure that we can find shelter and support for everyone that needs it.

We cannot forget our promise- first made by a Labour Government but maintained by every Government since- that healthcare should be made available free to all Britons at the point of delivery. We are investing a total of £9 billion in the NHS- a massive increase over what we inherited from the last Government- to bring healthcare back up to the quality levels that people expect and that they deserve. That means 3,500 new doctors, 2,000 new emergency staff, and nearly 20,000 new nursing and support positions to expand the quality care that the NHS provides. We’re adding new beds to reduce wait times and improve outcomes. We're expanding procurement of medical equipment to make sure our hospitals have the very best. We're investing in new buildings and in maintenance to make sure that when you do have cause to visit an NHS facility, you can know that you are in the best infrastructure that we can make available. We’re increasing mental healthcare spending by more than £750 million each and every year, a large increase to what we spend today- to make sure we can reach out to the people in need. And we’re also spending more in public health and in social care to go to where we’re needed. We’re doing this to expand access to care.

And we cannot forget our communities as well. We can’t forget that in this country there are people who are still looking for an affordable place to live, which is why on top of our homelessness initiatives we’re greatly expanding social housing starts by 50% to work towards increasing the housing stock and helping to attack the high housing prices in this country. This will be only a first step by this Government to truly and honestly tackle housing prices and availability – with this budget establishing a Housing and Infrastructure Development Bank to further such goals in the long-run – but this Government is proud that it can start here.

And to promote safety in these same communities we’re expanding the number of police officers on the streets by 20,000 in the next year to meet the needs and desires of every Briton to live in crime-free areas.

Each of these promises, each of these pledges, requires the great efforts of our professional Civil Service and public servants. Doctors, nurses, and staff help keep this country healthy. Police and fire services keep us safe and secure. Postal workers keep us connected and communicating. Our diplomatic corps makes sure we have the best representation abroad, and our soldiers keep a watchful eye out for threats that would do our nation harm. Every man and woman who puts on a uniform or takes an oath to queen and country had been asked to sacrifice and labored under a pay cap put in place by the previous Government- but this Government says no more. We’re lifting the pay cap and giving everyone who works on behalf of Her Majesty and the people a pay raise above the rate of inflation as an initial way of saying thank you for their services- and we will be there to support public sector workers with every Finance Bill after this one.

Mr. Deputy Speaker, with the Finance Bill 2015 we are taking up and fulfilling a charge. A charge from our people to continue down paths that lead to economic growth and prosperity, paths that lead to increased confidence and investment in the management of our economy. A charge to build a foundation for the future as we remember that it is our duty, no matter our affiliation, to look forward for the betterment of the United Kingdom. A charge to provide for those who need it, and a charge for making this country one in which all our basic rights to education, to care, to a productive life where honest work should reap an honest reward are honoured in full.

Today, Mr. Deputy Speaker, we affirm that we are committed to this country's future. We affirm that we believe in stability and predictability. We affirm that we are clear in building a better United Kingdom for every family living in it.

Each Chancellor's Budget speech traditionally begins with a recounting of the current state of Britain's economy. I noticed that the Chancellor rather glossed over the matter of the strong economic legacy that the Conservatives have left for him. I think it is important, Mr Deputy Speaker, that we go over it in some detail.

The economy is continuing to accelerate in growth as the country recovers from the financial crisis it suffered under Labour. Real terms economic growth is projected to be 2.7%, returning to a normal, pre-crisis, level. Inflation has fallen, reducing people's cost of living, and is now almost bang-on the Bank of England's target figure of 2%. Employment is rising rapidly. More people are employed in Britain today than ever before. Wages are growing in real terms. The deficit has been almost cut in half from its depths in the Labour crisis years, from 10% of GDP down to 5%. There is still work to be done, Mr Deputy Speaker, but there can be do denying that Conservative government has got Britain's economy back on track, and has left a glowing economic legacy from which to build a better future.

Instead, Mr Deputy Speaker, the Chancellor has presented us with this. A Budget of broken promises and illogical economic thinking. A Budget that bears only passing resemblance to the parties' election commitments, damages Britain's global competitiveness and engages in a short-termism that cannot be worthy of name of the “progressive future” called for in the subtitle of the Coalition Agreement.

This Budget finds itself composed of the shrapnel of scattered fragments of broken promises. Take, for instance, the deficit. The Conservatives having reduced it from 10% of GDP to 5%, as I say, Labour felt during the election campaign that that was inadequate, and promised voters a reduction of 1.2% of GDP in the first year of Labour in government. We now see that this promise will be broken, and the deficit will fall only by 1%. While 0.2% may feel like a quibble, Mr Deputy Speaker, what I am talking about is £3.5 billion. A £3.5bn whopper of a broken promise.

The Government promised, both in their respective manifestos and in the Coalition Agreement, that the Pension Triple Lock would remain in place, so that pensioners would never again have to suffer then indignity of the 75 pence of increase they once received from Labour. The Government have broken that promise, giving pensioners only an inflationary increase, denying to the what they has been promised.

The Coalition promised an end to the public sector pay cap. That end, it transpires, seems to apply only to professions that the Government likes. The pay of judges and court staff remains frozen, putting paid to any notion that this Government cares about law and order. Much worse, however, is the treatment of our Armed Forces. During the General Election campaign, Labour, and in particular the now Defence Secretary, may great play of the idea that they were the party that cared for the Armed Forces, promising a Triple Lock on pay for our Forces. It is sad, Mr Deputy Speaker, to see that promise unravel so quickly, betraying the brave men and women who keep this country safe.

The Coalition Agreement tells the country that the Government “will phase in any major adjustment to tax thresholds.” We have now seen the Chancellor's plans for Income Tax, Mr Deputy Speaker. Either what we have seen is not a phasing in of threshold changes, and thus a broken promise, or, perhaps even worse, this is a phasing in of threshold changes and the Government's war on the entrepreneur has only just begun.

The Government's attacks on entrepreneurialism continue with an utterly misguided raising of Capital Gains Tax. This move discourages investment, with impacts to be felt on the economy as a whole, and especially our balance of payments. This is a policy made for populist rather than rational reasons, and demonstrating a short-sightedness that is evident throughout this Budget. Another case in point is the Bank Levy. The banking industry is not the flavour of the month, but the fundamental truth of the matter is that banking is major sector of the British economy, employing hundreds of thousands of people, providing important revenues to the Treasury, and critically is one of the sectors in which Britain is a net exporter and has a comparative advantage. A 50% increase in the Bank Levy, as proposed by the Chancellor, will have New York, Frankfurt and Tokyo licking their lips at the idea of the City of London being made less attractive.

The Government's short-sightedness doesn't only extend to business. Several measures will have the direct effect of encouraging individuals to forsake long-term planning, to the disadvantage of themselves and of Britain more broadly. Cutting the Pension Tax Relief allowance discourages people from preparing for their future. Freezing the ISA allowance discourages saving for a rainy-day. Slashing Help To Buy makes it more difficult for people to get on the housing ladder with a home of their own. These changes are to direct Britons away from looking after themselves, and preparing for their own future, and directing them to rely on the state to provide for them instead. They are policies all to the detriment of the individual, and ultimately to Britain as a whole.

Mr Deputy Speaker, Britain is growing, inflation is falling, wages are rising. This is the dividend of four years of hard work, tough decisions and the long-term economic plan of a Conservative Government. The Coalition had the option to continue that path. Instead, they chose a different way. They chose to back-track on the promises they made to the British people merely weeks ago. They chose to engage in the politics of envy, targeting entrepreneurs and British industries. They chose to turn away from the long-term and promote the short, to the real disadvantage of British people. This is not a path to prosperity, Mr Deputy Speaker. This is a plan that forsakes the future, damages global Britain and demonstrates their “contract with the people” wasn't worth the paper it was written on. Far from “building a progressive future together”, this is a Budget of regression.

If I may begin with a small correction - the pay of judges and court staff has gone up, by 2.5%. The shadow chancellor is, quite frankly, utterly incorrect in making that assertion, as she would have known if she looked at the figures. But I can forgive her for that small clerical error.

Mr Deputy Speaker, I am very happy to see so many of the commitments that the Liberal Democrats made in our manifesto reflected in this package, and that it has been done so in a responsible way that provides for future investment, a sustainable economy and a fairer and more just country.

Let's talk about education, firstly. We have provided for a £1.6 billion increase in the pupil premium. That's more than double. That means our schools will now have access to far more funding to resources and teachers. We have also given, like all our public servants, teachers and school staff a 2.5% increase in pay.

We have, by an increase of approximately £1.5 billion in school grants, enabled investments in sex and relationships education, civics and citizenship education, history education, foreign languages instruction and lessons in life skills such as personal finance. This will massively boost the capability of our students to respond to the challenges of a 21st century economy defined by ever-greater globalisation and ever-increasing rates of technological change and disruption. It will make them more rounded individuals, better able to contribute to national discourse, better able to understand how to live a safe and prosperous life.

We have provided greater resources for special educational needs, ensuring all kids get the personalised education and support that they deserve. We have created a school trip relief fund, helping students enjoy the benefits and opportunities created by field trips. We will invest in opportunities to help children learn about the natural world, helping their communities achieve Green Flag Award parks and grounds. We will invest in sports opportunities and competitions, helping build upon talents and promoting good health and activity. We will provide free contraceptives to older students to prevent teenage pregnancies and STIs, ensuring unsafe sex never results from poverty or shame. We will fight period poverty, with measures to provide free sanitary products at schools.

Learning is not just for children and teenagers. As we grapple with the challenges and opportunities of the fourth industrial revolution, access to learning must be increasingly viewed as a lifelong guarantee. Reskilling and retraining throughout a career are likely to become near-ubiquitous. This government is ready to tackle those challenges. As a first step in this, we have provided for 15,000 extra government-funded apprenticeship places. We have also assured that gains to social mobility and university funding in recent years are solidified and built upon, with massive increases to per-student grants to compensate for reduced tuition fees.

Mr Deputy Speaker, this budget goes a long way towards rectifying some of the burning injustices within our country. We have £250 million for a Homelessness Action Fund, to end the national scandal that is rough sleeping. We will be building 18,750 new social homes this year, helping address the housing crisis. We are repealing the bedroom tax. We are reforming the cap on benefits to make it fairer for families facing pressures such as bereavement, disability and high housing costs. We have set up a fund to help those individuals and families who are facing long-term food insecurity. We are ensuring the implementation of Universal Credit has no "cliff edges", that nobody gets thrown into poverty by the phasing in of a new system. We are drastically reforming the sanctions and assessments system to end the national scandal of sanctions and assessments being used as a way to cut costs rather than ensure honesty.

This budget is good for our nation's long-term health. We have provided for a substantial increase in real-terms NHS funding - a 6.5% real-terms increase. 2.5% pay increases across the board. 3,500 new doctors and consultants. An extra 2,000 emergency staff. 6,000 more medical support staff. 10,000 new nurses. 7,500 new hospital beds.

Mr Deputy Speaker, the Liberal Democrat manifesto and the coalition agreement promised dramatic increases in mental health, in public health and prevention, and in resourcing integrated social care. We have to take these issues seriously, not just to ensure the long-term viability of the NHS, but also to ensure our government treats all aspects of health and well-being seriously. Mr Deputy Speaker, this budget delivers on all of those commitments.

And Mr Deputy Speaker - I think it is very telling that the Shadow Chancellor chose not to really talk about healthcare or education or poverty in her remarks. Can we take that silence to indicate that the Conservative Party accepts that the government's proposals here will deliver a fairer, healthier, better educated Britain? Or does the party frontbench opposite not think these issues deserve their attention?

Mr Deputy Speaker, environmentally, this is the budget that we need. Not only does it provide for the first steps in this government's ambitious green stimulus agenda, but it provides for a new flood protection agency. The Conservatives did not mention flooding once in their manifesto, but this government has taken it seriously.

This budget provides for a greener tax code, one that incentivises recycling and reuse, one that allows for bold reductions in greenhouse gas emissions, one that encourages businesses to take account of the social costs of pollution and invest in creating a sustainable economy. To do this, in addition to increases in line with inflation, we are implementing 5% increases to the aggregates levy, the climate change levy, the vehicle excise duty for high CO2-emitting vehicles, and the landfill tax. These measures will provide for an additional £277 million per year in revenue.

In addition, this government has undertaken a thorough plan to reform how government taxes fossil fuel production. Fossil fuel producers often receive different tax treatment from other industries and it is the view of this government that many of those differences are unjustified, constituting de facto fossil fuel subsidies that unfairly privilege fossil fuels over other cleaner and more sustainable energy sources. We understand, of course, that different industries require different tax codes and that many tax rules merely govern how the broader principles of our tax code are applied to this specific sector. We also are not targeting programmes that use fossil fuels in a proportionate way to fight fuel poverty and help rural economies. With these notes in mind, the government is pursuing the following reforms. These reforms will, in total, save the taxpayer £391 million per year. We are halving the field allowance rule, eliminating the ring fence expenditure supplement, eliminating the oil allowance, and eliminating the tariff receipts allowance.

This budget also provides instruction for a comprehensive reform of air passenger duty. We are replacing the Per Passenger Duty with a Per Plane Duty, taxing planes based on their environmental impact and distance travelled, ending the loophole that allowed plane freight to escape taxation and creating a fairer system. This will raise an additional £3.5 billion per year. We are also introducing a surcharge on domestic, and close international, flights when realistic and greener non-flight alternatives are available, raising an additional £300 million.

We can also announce a further £800 million, at least, will be made available for subsidies for renewable and green energy, beyond the measures within the budget. This is because we are cancelling subsidies for wood pellet burning. Such a process has, until now, been identified as a renewable energy for purposes of subsidy. Its impacts on deforestation, air quality, and greenhouse gas emissions make such a designation inappropriate from a public policy standpoint.

This government promised a greener tax code. We have delivered on that promise.

Mr Deputy Speaker, allow me to turn next to investing in our future. Not only are we increasing education spending by 4.6% in real terms as well as making substantial investments in skills and higher education, but we are increasing research spending too, as part of this government's commitment to ensuring the UK is at the forefront of science, technology, innovation and culture.

I am especially proud of our capital spending commitments. These investments will expand our economy and ensure future fiscal and economic sustainability and prosperity. Let me say now that the concerns about underspending and suboptimal use of funds are misplaced - while these are certainly always things to be wary of with regards to capital spending, we are not just pouring these funds into shovel-ready projects. We were aware of the limits of such investments, and the civil service also ensured they were kept them in mind throughout the budget talks. We are using these funds, in addition to meeting infrastructure needs now, to set up a long-term capacity to invest in our country.

Why are we making such a radical investment? Because historically Britain has underinvested in capital spending. We have one of the lowest rates of investment within the EU. We have a shortage of long-term patient finance, or of finance willing or able to effectively bear certain types of risk. We have no effective public mechanism, no state investment bank, to provide such long-term investments, engage in infrastructure investment, or engage in countercyclical lending.

Now, I am usually a voice of relative caution when it comes to economic policy - I don't believe in dramatic changes that can completely overturn investment strategies, I think it is wrong to pull the economic rug out from under people, I sincerely believe that free markets and price incentives, well-regulated and with an entrepreneurial state providing for the goods the market can't, are the best overall system for prosperity and justice. But I am a radical when it comes to the need to improve capital investments, and unashamedly so.

What investments are we making? We are providing £2 billion in initial seed capital to set up a British Business Bank, to increase the credit options available for small and medium enterprises, providing a source of patient capital, advisory services providing technical and locally-informed business advice, countercyclical lending, and other financial services currently in short supply. We are providing £5 billion in seed capital for a Housing and Infrastructure Development Bank, to leverage public and private investment for the investments in housing, transport, infrastructure and utilities that our nation needs.

Beyond this, we are making many other dedicated and much needed investments. We will be creating an Industrial Strategy Challenge Fund, to help fund those businesses and localities that are at the forefront of tackling societal challenges and placing the UK at the forefront of the fourth industrial revolution. We will be providing green stimulus funds, to create green jobs. We will be providing grants for capital spending projects ready-to-go across the country, and helping local authorities embark on their own projects and pursue their own priorities. We will be investing in rural economies and rural infrastructure. Finally, we will be launching an ambitious "Invest to Save" programme, to provide for long-term efficiency savings in both business and government by making savings in areas such as energy efficiency.

Let us now turn to the broader fiscal outlook. The deficit has gone down. That's very important, and that was something we in the Liberal Democrats put a lot of work into achieving. The current budget - which is the prime indicator of our fiscal health and fiscal sustainability - has gone down over £4 billion more than if we'd done nothing at all. This is before the results of our spending review and before we have implemented all the planned reforms we wish to make over the course of this parliament. The message from the budget is clear: Britain is on a sustainable fiscal path. A few years ago, nobody could have said that. We can now say that. That is something for us all to be proud of and for us all to take comfort in, as we now have the flexibility and adaptability that comes from having a rapidly declining current budget deficit.

We have also implemented a tax reform package free from nasty surprises, with no broken red lines. All of the big policies revealed were forewarned of well in advance, we're handling tax increases smartly and sensibly, we haven't focused tax increases disproportionately on any one sector or demographic, we've coupled this with tax decreases to where they are needed most - SME corporation tax and the personal allowance. Corporation tax for small businesses went from 20% to 18% - it will go down to 15%, we have committed to that. The personal allowance - the increase of which has long been a Liberal Democrat priority - has been increased to £10,000. Taxes such as VAT and alcohol taxes have not seen any increases above the rate of inflation. For a vast majority of taxpayers, this budget means more money in their pocket.

Much revenue increase, too, came from closing loopholes. It came from improving enforcement. It came from removing sections in our tax law that do amount to subsidies by another name. I think when you take that into account, the tax burden on most hasn't really shifted dramatically. We did things sensibly, rather than applying big and blunt tax changes. Over half of the increase in revenue comes from economic growth. Of the approximately £25 billion in increased revenue that remains, nearly £10.5 billion comes from closing loopholes, improving enforcement and giving HMRC far more resources to fight tax evasion and tax avoidance. Nearly £4 billion comes from increased green taxation and removing de facto subsidies for fossil fuels and pollution. Over £2 billion comes from property taxes, a first step in discouraging land banking and freeing up property for new homes, a first step towards pursuing the cross-party consensus on land value taxation. Once those measures are accounted for, it is clear that this is a budget that is sensible and pragmatic when it comes to taxation.

I thank my Right Honourable friend for bringing this budget before the House in such a timely manner. I am sure many of my colleagues on this side of the House will agree with me that there is much to welcome and take pride in in this budget, which demonstrates a good foundation for that progressive future promised in the Coalition Agreement. I am sure there are also members of the House who are quite rightly wanting to pick apart the detail of the budget to gain insight into policy proposals for each governmental department. However, there will also be those members, Mr Deputy Speaker, who try to use it to make some wildly philosophical points about economic strategy. To them, Mr Deputy Speaker, I remind them that the proof of the pudding will be in the eating and that one budget does not an economic strategy make. It will be the Government's demonstrative approach to the economy over time that will be the largest indicator of their successes and I look forward to seeing this budget being implemented as the first step in that, with much more to come. We must avoid, Mr Deputy Speaker, using the budget to make sweeping judgements on economic policy but rather act as the responsible legislative body we are and hold the Government to account for the detail and substance. I hope the Government in their responses will make clear why they made the individual choices they have made and be responsive to scrutiny, as the public would expect.

Mr Deputy Speaker, those in the House who know me well will know I am a purveyor of detail when it comes to areas of particular interest to me and my constituents. One of the largest of those areas is the environment, which has continued direct impact on the people of Tynemouth and of coastal constituencies across the country and I thank my Right Honourable friend the Chancellor for making it clear in this budget that the environment is a key part of the Government's thinking on both Britain's role in the world and on our economy. Britain's coasts and rural areas depend on governmental support for the environment, forestry, fisheries, agriculture and environmental sciences and it is important that the budget reflects that.

Looking then, Mr Deputy Speaker, at the detail the Government has put forward. I have been privileged to work in the environmental sciences industry for many years and I was pleased to see some good works being done in this budget. I was especially pleased to see an additional £20m being given to the Environment Agency to support their vital work. Ensuring our public executive agencies are well-funded is a security priority for Britain's environment. I welcome, Mr Deputy Speaker, the Government's plans to introduce a new Flood Protection Agency and the allocation of appropriate funding for that. Flooding is a concern for coastal constituencies such as my own and it is vital that our seaside communities get the support they need to tackle the very real threat that climate change poses. Mr Deputy Speaker, I wish the Government luck in their endeavour to tackle this and look forward to further legislation being brought forward to outline exactly what authority and powers the Flood Protection Agency will have.

Mr Deputy Speaker, projections made in this budget indicate that Britain's overall CO2 emissions will reduce by 42.9 metric tonnes. Whilst this is a good first step for the Government, and indeed most areas across our economy will replicate this if the projection is accurate, I am concerned that Britain's CO2 output is still in the 500 metric tonnes range. I hope the Government will take appropriate actions throughout the coming year to push for a further reduction to get Britain below the 500 mark. I hope in his reply, the Right Honourable Gentleman might be able to outline some of these measures to reassure the House that this high CO2 emissions projection should not be a further concern. Particularly, Mr Deputy Speaker, the works the Government plans to undertake to reduce the emissions of Transport and Agriculture which continue to rise under these plans.

Mr Deputy Speaker, I welcome the additional £1bn the Government is putting into low carbon subsidies. I am certain that members across the House will join me in thanking the Government for putting this money in place to support Britain's continued transition to a low-carbon economy. I wonder, Mr Deputy Speaker, if my Right Honourable Friend might outline how these subsidies will be distributed across industry, regions, nations and income brackets?

I do, however, Mr Deputy Speaker, have to express some slight disappointment. The Government have made a big fuss of their green energy agenda and this is welcomed, I am sure, across the House, but the lack of substantial rise in energy research or energy efficiency schemes is somewhat lacklustre. I hope the Right Honourable Gentleman might now take a moment to outline the rationale behind the decision not to offer substantial investment in those areas?

Mr Deputy Speaker, I can see much to take pleasure in this budget. I can see the Government making strides toward taking climate change and the various nuances of that threat seriously. I can see them considering coastal communities, hard working families and businesses. I can see them trying to lower emissions, investing in low carbon energy and environmental protection. What I hope the Government will now do, Mr Deputy Speaker, is give us specifics, details, legislation and explanations that back up that agenda. The details, Mr Deputy Speaker.

If I may quickly respond to the honorable member for Tynemouth - there are investments in energy efficiency and energy research that this budget has provided for. Now, she is correct in noting that the exact sums have not yet been allocated and the exact division of appropriations has not been determined, but under the green stimulus plan and the "Invest to Save" programme, there will be funds for those needs. I am happy to correct that misinterpretation and am happy to invite the honorable member to meet with me at BECC and discuss in detail how we can best use the resources that this budget provides for.

Mr Deputy Speaker I would like to begin my remarks today by thanking the Right Honourable Gentleman for his statement today, whilst a lot of the government cannot be bothered to turn up or simply make their announcements via the press it is refreshing to see a government minister actually in the House of Commons. But Mr Speaker this is where the congratulations and welcome must end because this is the single worst budget I have ever had to sit through in my career.

Mr Deputy Speaker never before in all my years have I seen a budget fall apart so rapidly as this one. Within hours of it being made available to members there have already been u-turns to replace the unpopular u-turns that this budget originally contained. This Government stood on two fundamental triple lock promises, the promise to retain the triple lock for pensioners and the promise to implement a new triple lock for our armed forces, due to a “clerical error” these triple locks were absent. Mr Deputy Speaker this is sheer tripe. This budget will have been checked by civil servants, it will have been checked by the Right Honourable Gentleman the Chancellor, and one would hope it would have been checked by Her Majesty’s Government. Mr Deputy Speaker in short the only way that a “clerical error” could have been made is if every single member of Her Majesty’s Government overlooked two of their flagship policies. In times like these there is an established way of dealing with the fallout Mr Deputy Speaker, the minister whose department made the mistake resigns. In the real world if we were to make mistakes that fundamentally changed the nature of the product we were delivering, completely ignoring two major specifications, we would in all likelihood face severe repercussions and quite possibly be fired. Will the Right Honourable Gentleman do the honourable thing, respect centuries of Parliamentary convention, and resign?

But Mr Speaker it would be easy to get bogged down in the minutia of a constitutional question and a supposed “clerical error”, the government have seen the negligence of their ways and have announced in the press that they will amend the budget to increase the pay award and the pensions. This does however rather neatly bring me on to the issue of the deficit and a rather more fundamental issue that this budget presents. In 2010 the Coalition implemented a long term economic plan, now in 2014 the Sequel have presented the short term grab and go. This budget has no long term ambition it is only dealing with the present. Mr Deputy Speaker the infrastructure plan alone will saddle our country with £250mn in debt interest every year, that is as much as the government want to spend on their entire homelessness action fund, and now the government has committed to two further pro-spending u-turns. Mr Deputy Speaker this year the British Government will borrow almost exactly the same amount that it borrowed last year, despite 2.7% economic growth, stable inflation, and falling unemployment, all of which they inherited from the economic successes of the Coalition and our long term economic plan. This Government will waste the gains of the previous one on a gamble of some short term growth balanced by long term crowding out and higher interest rates.

Mr Deputy Speaker my Right Honourable Friend the Shadow Chancellor has already provided a great critique of many areas of the budget so I think I’ll spend my time on issues that she has left open for me. Let us take the example of healthcare which this government, despite its funding promises, has completely messed up in this budget. Mr Deputy Speaker this government has presented an ambitious plan to provide 7500 new hospital beds, an increase of 5000 on the current NHS provision, unfortunately NHS recruiters will not be able to fill the vacancies because the Government hasn’t given them the money to. This budget has a shortfall of 214 GPs and doctors, 2100 nurses, and nearly 4000 managers and administrators. Mr Deputy Speaker what use will a hospital bed be without a doctor to treat the patient or a nurse to support, how will the beds be allocated and the hospitals run without managers and administrators? Leadership is about making tough decisions in the long term interest of the country, this government has deferred all the tough decisions by borrowing more money and has ignored the long term needs of the country in favour of a catchy headline. The Labour Party used to preach that they were the party of the NHS, on this budget Mr Deputy Speaker we can call them many things but we certainly cannot call them the party of the NHS. This budget will lead to doctors being overworked, there being too few nurses, and inefficiency growing because there just aren’t enough members of staff to go round. This government needs to get its act together before our NHS suffers the consequences of their ill-discipline and their headline grabbing ways.

Mr Deputy Speaker we can also talk about this government’s shockingly blasé attitude to justice and the protection of our public’s safety. Now my Right Honourable Friend has already spoken about this to a lesser extent but it bears repeating that this Government’s plan reduces prison capacity by 1000 at a time when prison populations are increasing. Mr Deputy Speaker this is outrageously reckless by the Government, it puts our nation’s security and prison workers in danger from overcrowding and it is not good for the prisoners themselves. Will the Government replicate their public u-turn pledge for pensioners and our armed forces to protect our hard working prison officers and afford them a better set of working conditions?

But then again Mr Deputy Speaker I am yet to see any actual proof of the Government’s u-turn on pensions and the pay of our armed forces. The Prime Minister gave a great big press conference on the subject and yet no member of the Government has risen to actually talk about pensions or armed forces pay at all, let alone offer up an amendment. Mr Deputy Speaker this is beginning to look less and less like the negligence I ascribed to it earlier and more and more like a concerted effort by Labour and the Lib Dems to avoid following through on manifesto and coalition agreement policies. The old adage “never attribute to malice what may first be attributed to incompetence” is starting to look a little out of place in this whole debacle as I’m sure you’d agree Mr Deputy Speaker. I am loathe to call the government a pack of liars but there is a growing sentiment among the population that the parties opposite will find hard to overturn if they don’t hold themselves to the promises that they spent months making to the electorate, policies which formed the basis of their entire electoral victory some might argue.

Mr Deputy Speaker, this budget is a budget of failure. Pledges that were made have been proven time and time again to be mere inconveniences that can be dropped at the push of a button, promises made to the press and the people to return to their pledges have been proven to be false by the Government’s own inaction, and the investment we were promised has been woefully lacking in key areas. This Government cannot get to grips with pensioner poverty because they cannot get to grips with their own commitments to pensioners, this Government cannot get to grips with the NHS because they can’t even staff their new hospitals, and this Government cannot get to grips with justice in this country because they are cutting prison places at a time when prison populations are rising. This Government have proven themselves to hold the people of this country in utter contempt, happy to make grand statements of vision which fall apart under closer inspection. It is shameful, it is disastrous, it is a failure by any objective metric and I urge the House to reject this shambles of a Finance Bill.

Conservative MP for North East Bedfordshire
Leader of the Opposition (2014-16)

Allow me to echo my colleagues on this side of the House by simply saying this: this is a budget built on broken promises, and destined to deliver lower economic growth, greater national debt, and a bleaker future for The United Kingdom.

From spending to tax policy, the first budget presented by the new coalition government is a resounding disaster for our country, its economy, and its long term success. A government that promised so much, that told the British public they would usher in a new era of innovative policy making, has delivered a haphazard mess of a budget that not only fails to deliver on the government's promises but succeeds in undermining the progress made by the previous Conservative-led government.

Let's start with those promises, Mr. Speaker. The government promised to implement triple lock protections for pensioners and members of the armed forces. Not only did they fail to meet this promise when the budget was introduced, but the issue still remains despite constant assurances from the Prime Minister that the budget would be amended accordingly. Millions of pensioners and hundreds of thousands of servicemen and women stand to lose because the government can't be bothered to take a few minutes and amend their own budget. It's shameful, Mr. Speaker, and it's a testament to a government seemingly more concerned with their public image than they are with crafting good policy.

The government also promised, Mr. Speaker, to continue to reduce the country's deficit. Once again, despite their many campaign pledges, the government has introduced a budget that fails to make good on their commitments. The budget they've presented barely reduces the deficit, and commits us to massive spending projects with no clear understanding on their return on investment. When asked how the government plans on balancing the budget, the Prime Minister tells us that deficit reducing is "coming in the future" and that the Business Secretary will eventually inform the House as to the government's strategy. I won't be holding my breath, Mr. Speaker.

Beyond the promises the government has failed to keep, we have a series of growth-destroying tax provisions proposed in this budget. The government's planned hike in capital gains tax will discourage future investment, starving British business of the capital it needs and making it more expensive for everyday Britons to become share holders. They've created a new income tax band, eager to tax British citizens at higher and higher rates any chance they get. The budget slashes funding for Help To Buy, making it harder for families to purchase their first home and have property to pass onto their children. And with their increase in the Bank Levy, the government has jeopardized London's status as the world's financial capital and made banks more adverse to granting loans to small businesses and entrepreneurs.

This is a bad budget for Britain, Mr. Speaker, plain and simple. The budget's roll out has been a disaster, but that pairs in comparison to the damage the budget will actually do to the British economy if it's allowed to pass. Labour has once again proven they should be allowed no where near this country's economy, and I urge the House to stand with the Opposition and reject a disastrous budget that threatens the health of the British economy.

William Croft
Member of Parliament for Bracknell
Shadow Foreign Secretary
Chairman of the Conservative Party
Chief Whip of the Conservative party

For those that need assistance and who need to be walked through the process, the budget HAS been amended to reflect the statement made by the Prime Minister. We are now living up to our funding promises.

The bigger mistake would be to give any credence or support to the comments from the Opposition. The fact is that they feel so safe to attack one small portion of this budget while at the same time offering no alternatives of their own. No information, no ideas. Just attack attack attack- like they've done to the NHS and to every program they've gotten their hands on.

Mr. Deputy Speaker, we are giving our military the pay raise they deserve. But does this body recall which Government CUT spending on our military and service members? It's the one currently in Opposition, Mr. Deputy Speaker. For all the blather about a failure to keep up with a promise- a failure that has been rectified, it comes while the Opposition obfuscates their own role when it comes to supporting those who defend this country.

Mr. Deputy Speaker, the Opposition won't even mention the changes to the NHS- the expansion that are so desperately needed. That's because the last Government, which currently sits in Opposition, was starving the NHS relative to its needs each and every year. So while we have rectified THEIR failure, again we see obfuscation and deflection.

The same is said in so many areas. Education, where we have the last Government to thank for making higher education less obtainable to those who can benefit the most. Housing, where we have the last Government to thank for falling even further into a pit of having far less homes than people needing them. And none of this is mentioned, rather instead to deflect, to obfuscate, to focus on something which this Government has actually FIXED, along with the problems we've inherited along the way.

Mr. Deputy Speaker, were the Opposition serious, they'd present a shadow budget proposal. They haven't, and they're not. Because they couldn't care less about the needs to this country and its people. We do. We have shown it through this budget and through making this budget right where it might have been lacking.

Mr Deputy Speaker I am afraid that the Right Honourable Member, the Chancellor, is mistaken, we on this side of the House have engaged with the budget and have indeed found issues outside of the resignation-worthy "clerical error" that make this budget wholly unsuitable for the United Kingdom.

The Right Honourable Gentleman suggests that we are not engaging with healthcare in this country, Mr Deputy Speaker I humbly submit that it is the Right Honourable Gentleman who is not engaging with healthcare in this country. Whilst he might like to talk the big talk of investment his policies will mean that he will be opening dozens of new wards which will have no patients in them, kind of like something out of North Korea. This Budget does not provide enough staff to man the additional requirements this budget would place on hospitals. The Right Honourable Gentleman may wish to pretend that his alterations and investments are a credible plan but in reality they are merely spending without substance. There is no plan underpinning this budget it is simply a case of throwing money at a wall and praying that something sticks.

Put simply Mr Deputy Speaker this budget contains at least a dozen issues that should see various members of the Cabinet fall on their proverbial swords. It is British constitutional convention that a Minister is responsible for his department, the department's mistake is the Minister's mistake, and when the department makes a mistake the Minister resigns as a matter of principle. Mr Deputy Speaker I ask the Chancellor when he intends to resign, or does he view himself as above the centuries of constitutional convention that underpin this place? Not to mention the experiences of real life people who get fired for making these sorts of errors on a daily basis.

Mr Deputy Speaker, this budget is a turd, the Government have tried to polish it but as the old saying goes you cannot polish a turd. This budget failed pensioners, under immense pressure from this side of the House it has been rectified. This budget fails savers by halving the pension tax relief. This budget fails the ill by providing for new beds that are understaffed and therefore ill-suited to actually receiving patients. This budget is a failure, pure and simple. I urge the House to reject it in its entirety.

Conservative MP for North East Bedfordshire
Leader of the Opposition (2014-16)

It appears there has been another error in the budget document which has been corrected, ensuring the full increase across pension programs as mandated by this Government's Triple Lock commitment. It has been addressed and amended.